Garfield Building renovation among the winners of Ohio Historic Preservation Tax Credits

Three projects in the Tremont, Ohio City and Detroit Shoreway neighborhoods of Cleveland, and the Garfield Building renovation in downtown to apartments, are among the winners of $37.7 million in Ohio Historic Preservation Tax Credits announced Tuesday, June 24, by the Ohio Development Services Agency.

The award in the Tremont neighborhood included a $1 million historic tax credit to MCM Cos. for a proposed $5 million conversion of the church, school and rectory buildings of Our Lady of Mercy, 2425 W. 11th St., to offices. MCM Cos. of Cleveland is operated by Melissa Ferchill and has completed several adaptive reuse historic projects in the past.

The Ohio City award is for $248,375 to substantially rehabilitate the Guernsey Apartment Building, 2836 Franklin Blvd. The $1.74 million project will update the building’s mechanical systems, repair its roof and update the 25 suites as contemporary living spaces. The building is owned by a partnership led by Beachwood lawyer and apartment owner Dan Siegel.

The Detroit Shoreway project that received an $180,000 tax credit is the New West Lofts Storefront, 6710 Detroit Ave., to renovate the first floor of the Gordon Square Arts District building as a restaurant. An affiliate of the Detroit Shoreway Community Development Organization renovated the rest of the building in 2006

Independence-based Millennia Cos. received a credit allocation of $5 million for its $32 million adaptive reuse of the Garfield Building, 1965 E. Sixth St., to 167 apartments and three restaurants. The building dates from 1893.

David Goodman, director of the Ohio Development Services Agency said in a news release that the Ohio Historic Preservation Tax Credit “leads to investment in both small towns and big cities. These projects strengthen local communities and create construction jobs during the renovation and permanent jobs once the building reopens.”

Projects to rehabilitate 35 buildings in 13 communities across the state received funding in the 12th round of the state program. The state estimates that if all the projects receiving awards statewide are completed, the tax credits will leverage $250 million in private investments.

Other Northeast Ohio projects that received allocations of state historic tax credits are as follows:

Akron Soap Co.

Total project cost: $2,266,000

Total tax credit: $448,000

Address: 237-243 Furnace St., Akron

Description: Completed in 1893, the Akron Soap Co. factory was constructed to manufacture “Grand and Electric Grip Soap.” The vacant building will be renovated for Whitespace Creative, an Akron-based marketing and public relations firm, which purchased the property to accommodate its growing work force. The company estimates the building will house 54 jobs.

Falls Stamping and Welding

Total project cost: $1,328,754

Total tax credit: $241,261

Address: 1701 S. Front St., Cuyahoga Falls

Description: The vacant 1928 vintage building has served various manufacturing and warehouse uses over the years. Now vacant, the industrial structure will be transformed into commercial office space for TRIAD Communications/Next Generation Interactive of Cuyahoga Falls, which will locate 15 jobs at the property after rehabilitation. The project is the first project in Cuyahoga Falls to use the Ohio Historic Preservation Tax Credit program.

Firestone Triangle Building

Total project cost: $25,527,223

Total tax credit: $5,000,000

Address: 1200 Firestone Parkway, Akron

Description: The Firestone Tire & Rubber Co. hired architects Harpster and Bliss in 1910 to design a modern, efficient factory. Now mostly vacant, the property is being redeveloped in multiple phases. In its first phase, part of the property will be repurposed from industrial to office space. Summit County will move its departments of Job & Family Services and Environmental Services into the building.

Murphy Hall

Total project cost: $36,683,809

Total tax credit: $1,907,300

Address: 1 John Carroll Boulevard, University Heights

Description: Murphy Hall is located in the John Carroll University North Quad National Register Historic District. The building originally housed 400 male students and was the first dormitory to house females at the campus in 1969. Upgrades will modernize the building’s interior while keeping its 1962 Gothic Revival features.

Win some, lose some

Major projects that failed to garner state funding are a big part of the story on round 12 of the state’s increasingly popular preservation tax credit program.

Herb Wedemeier, senior vice president of St. Louis-based Drury Hotels, said his company is “very disappointed. The state historic tax credits are a critical component of the project.”

Drury sought the maximum award, a $5 million tax credit, for its $40 million plan to reuse the former headquarters building of the Cleveland Metropolitan School District, 1380 E. Sixth St., as a Drury Plaza Hotel.

Wedemeier said Drury plans to study how the state scored its application and consider applying for the next round of state credits with a Sept. 30 deadline. If that fails, Drury may have to find a way to rework its project.

“However, costs are very challenging in historic projects. We were looking to start all out in late July with availability in late fall 2015,” Wedemeier said. “It’s a 14- to 16-month project after we start.” Meantime, demolition of unneeded areas inside the building will continue, he said.

However, Drury was not alone. Developers of other major projects, as well as many small ones, failed to land credits.

Los Angeles-based Industrial Realty Group sought a $5 million credit for $84 million of qualifying historic rehabilitation work in the $127 million conversion of the old Goodyear headquarters building, 1200 Market St. in Akron, to a mixed-use project.

An investor group led by Cleveland-based Landmark Management Group principals John Carney and Bob Rains also sought a $25 million credit for the renovation of the upper floors of the May Co. Building on Cleveland’s Public Square to 353 apartments.

Rains said the group planning the May Co. redo had not expected to get funding in this round, but thought it valuable to apply for funding and go through the state’s review process. However, he noted the May Co. developers also will apply for a planned ‘catalytic” historic preservation credit award added earlier this year by the Ohio General Assembly.

The new “catalytic” award category allows Development Services to award a tax credit of as much as $25 million to one project in Ohio each year for 2014 and 2015, according to a summary by the Ohio Legislative Service Commission.

Rains noted that in any case, securing the preservation tax credit is only part of the battle to restore a major building to active use.

“It’s one thing to get that tax credit award. It’s another to get the financing. The two don’t go together,” Rains said.

A return phone call from IRG CEO Stuart Lichter was missed June 24, and he could not be reached on two subsequent calls.

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